The Franchise Memorandum

A federal court in Ohio recently approved a class action settlement of a wage and hour lawsuit brought on behalf of a class of pizza delivery drivers against a Domino’s franchisee and various Domino’s corporate entities, including the franchisor of the Domino’s system. Mullins v. S. Ohio Pizza, Inc., 2019 WL 275711 (S.D. Ohio Jan. 18, 2019). The plaintiff, a pizza delivery driver for Southern Ohio Pizza, a 19-unit Domino’s franchisee, alleged that the franchisee and Domino’s were his joint employers, and that as such they under-reimbursed him and similarly situated workers for their expenses related to using their own vehicles to deliver pizzas. The plaintiff also alleged that the defendants improperly paid him and similarly situated workers a tipped wage rate for hours worked in a nontipped capacity and failed to properly provide notice of the tip credit requirements of the Fair Labor Standards Act. The defendants denied the allegations, and the Domino’s corporate defendants asserted that they were not joint employers of the plaintiff.

Following mediation, the parties reached a settlement without any admissions of culpability, and the court approved their agreement. Under the settlement, the defendants agreed to pay $1,070,000.00 to class members, $348,689.50 in attorneys’ fees, $6,310.50 in litigation expenses, and $10,000.00 as a service award to the class representative. It is not publically known how the settlement payment was allocated between Domino’s and the franchisee. This past fall, Domino’s won dismissal of three nearly identical lawsuits filed in the Southern District of New York on the basis that it was not a joint employer.